8-KLeadership Changes

American Water Works Company, Inc. 8-K Report, Executive Changes (Nov 12, 2014)

Filed November 12, 2014For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) filed an 8-K on November 12, 2014, to report the departure of its Senior Vice President, General Counsel, and Secretary, Kellye L. Walker. Her employment is set to conclude on January 6, 2015. The filing details the separation agreement, outlining the financial and consulting terms Ms. Walker will receive, as well as continued benefits and covenants she is subject to. Investors should note the financial implications of this executive departure, including the severance package and consulting fees totaling $930,375, spread over a year. The agreement also includes reimbursement for COBRA premiums for 18 months. While the base compensation terms are clear, the final payout under the 2014 Annual Incentive Plan and equity awards will depend on company performance and plan specifics, which aligns with prior practices.

Key Highlights

  • 1Departure of Senior Vice President, General Counsel, and Secretary, Kellye L. Walker, effective January 6, 2015.
  • 2Separation agreement includes a total severance and consulting payment of $930,375, payable over 12 and 6 months, respectively.
  • 3Ms. Walker will provide consulting services for six months post-termination.
  • 4Company will reimburse COBRA premiums for 18 months following her employment termination.
  • 5Ms. Walker's 2014 Annual Incentive Plan payout will be based on target award and corporate performance multiplier, consistent with 2013 methodology.
  • 6Equity awards and 401(k) and nonqualified deferred compensation plan benefits will be settled according to their existing terms.
  • 7Ms. Walker is subject to a confidentiality covenant and must provide a general release to the Company.

Frequently Asked Questions

Ms. Walker will receive a severance payment of $612,250 and a payment of $318,125 for consulting services, totaling $930,375. These payments will be made over a 12-month and a 6-month period following her termination, respectively.

Yes, the agreement provides for reimbursement of COBRA premiums that Ms. Walker pays for continued health insurance coverage under the Company's health plans. This reimbursement will occur over an 18-month period following her employment termination.

Ms. Walker will receive a payout under the Company's 2014 Annual Incentive Plan based on her target award and the corporate performance multiplier approved by the Board, which is consistent with the methodology used for the 2013 plan. Her benefits under the 401(k) plan, nonqualified deferred compensation plan, and entitlements under her equity awards will be determined in accordance with their respective terms.

Ms. Walker has agreed to provide consulting services for six months following her termination. She is also subject to a confidentiality covenant and must provide a general release to the Company.